SEC Targets Option Backdating In Broad Probe

Law360, New York (November 11, 2005, 12:00 AM EST) -- Federal regulators have quietly launched a far-flung investigation into the widespread practice of backdating stock-option grants to boost profits for corporate insiders, a practice that led to the resignation last week of top executives at the software company Mercury Interactive.

The investigation by the Securities and Exchange Commission, which began last year, targets what the agency suspects is the widespread abuse of insider information to manipulate the price of options.

The probe originally focused on timing stock-option grants to benefit from positive corporate news that would...
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